Why Most Approaches to App Monetization Are Bad for Users | Is There a Better Option?
We’ve probably all heard about ways to earn extra cash using apps. Some apps offer a decent amount of compensation for our content, and some pay us in bitcoins. Whether we earn a lot or just a little, every little bit helps, right?
Maybe not. Some of the options are actually not good for us, and sometimes we can lose money instead of earning.
Most of us download apps without giving a second thought to the real intent behind the free application. It’s important to understand how app monetization works and to know the possible consequences for us as users.
So, what are the main ways app owners monetize their product?
Pay to Download
This is the simple pay-to-get model. The user can’t download the app without paying some amount up front for the product. To convince users to pay for their app, companies have to present and market the app in the best way possible.
If they are simply out to make money, app marketers they will present a false image of the app. It’s crucial to do your homework. Read the app description, go through the screenshots and check out the reviews before handing over your money. Apps usually don’t cost a lot, but if you pay for all your apps, it adds up.
The problem is, even after doing the research, we still can’t know whether we’re going to like and use the app until after you’ve paid for it, so it can turn out to be a money loss.
The Premium Version
This is a mixture of free and paid models: you can download the app for free and have access to almost all the features. Before you know it, you might be bombarded with in-app ads and you might realize you have limited filters, frames or editing options. To access to all the features and benefits or to get rid of the ads, you’re offered the “opportunity” to pay for a premium version of the app.
This option can be good for some professionals. For instance, if you’re a pro designer and you need all the features of that editing app, the premium version might make sense. Just make sure you know what you’ll really get for your money. If it’s just one or two new brushes, think twice whether it’s a good idea. Also, make sure you know if you’re making a one-time payment, or if they’ll automatically charge you every month. Once again, pay attention to details, and read the benefits of the premium version, especially the fine print at the bottom of the page.
In-App Advertising
This approach is very common. App owners generate revenue by selling advertisements within the app. Every time you see or click on an in-app ad, companies earn money. The ads can be placed anywhere. Some pop up on your screen when you open the app, others are placed between your messages.
The biggest con of having to see these ads is that they collect your personal data. The app company agrees to host ads on their platform, but it’s not responsible for leaked data. Any time you click on an ad, you’re redirected to a third-party platform where your data is not safe.
Subscription-Based Model
This is a similar app monetization option to paid apps. Users are charged monthly or yearly to access in-app content. A few common examples of these types of apps are Spotify and Netflix.
The downside of the subscription-based model is that sometimes you have to pay for the entire year. If you decide to cancel your subscription, you’re charged a penalty fee. Also, you pay money expecting premium quality content, which may or may not be there. Even if the content quality is excellent, you still have to endure countless ads that interfere with your ability to enjoy it.
Sponsorship Model
This is where app companies offer you free use of the app and then earn money by hosting third-party content from sponsors. The app company finds a sponsor with a similar target audience and gets paid for hosting their ads, quizzes, games or any other content within the app. As a result, you as a user of the app will not always realize how your data is processed and who really has access to it.
It must be clearly stated in the Privacy Policy of the app that a third-party app will have access to your personal data. The policy also should mention how your data will be used after it’s collected. It’s possible that you have the chance to earn rewards for playing a sponsor’s games or clicking on the banners, but make sure you understand the real cost of “earning” these rewards. The only free cheese is in the mousetrap.
Rewards-Based Model
This model gives you a chance to earn some extra cash by watching videos, ads, taking active actions on the platform or posting your content. The problem is, that’s when the app collects your data and starts bombarding you with targeted ads, emails and push notifications. Basically, you give the app the green light to follow you around and access your data. What you get in exchange can be as little as 1 dollar that you can’t even withdraw until you accumulate a certain amount of money.
So, is there an approach to app monetization that works for users?
We all need to remember that every app needs to earn money. After all, the app company has spent thousands, or even tens of thousands of dollars to build an app that is useful and fun. This means they will seek ways to monetize their product. That’s nothing unusual; after all, it’s a business.
As users, we just need to be aware that some companies chose ethical approaches to app monetization and others exploit users and sell their data. When choosing the apps you will use, look for truly user-centric apps that are committed to protecting your data and money.
POP is one of them.
POP believes users have the right to control their social experience. So POP’s business and monetization model puts users in control of their data, content and monetization. To make POP a user-friendly and user-centric platform, we invented a revolutionary model where users “own” the platform. You decide whether you want to see ads. You control who can access your content and what they can do with it. And, you can monetize your following and earn on your data if you want to. The platform is yours!
